RE/MAX Holdings, Inc. Q2 FY2025 earnings call

• Global agent network ended Q2 with over 147,000 agents, an all-time high. - Signs of stabilization in U.S. agent count; profit and margin performance exceeded expectations. - Housing market had sluggish backdrop but saw inventory levels up 30% vs June 2024 and new listings up for 16th straight month. - Stance on NAR clear cooperation policy unchanged; focused on consumer outcomes. - RE/MAX agents at large brokerages outperformed competitors by over 2:1 for 17th straight year. - Worldwide agent count hit record high; best U.S. agent count performance since Q2 2022. - Welcome RE/MAX Hawaii to the team, strengthening market share in Hawaii. - Launched Aspire onboarding program, nearly 60% of U.S. and Canada brokerages signed up. - Launched AI-powered global referral system; RE/MAX Media Network infrastructure in place. - Support mortgage business with new tools; searching for next leader of mortgage business.

Total revenue was $72.8 million, adjusted EBITDA was $26.3 million, adjusted EBITDA margin was 36.1% (an increase of 30 basis points over Q2 2024), and adjusted diluted EPS was $0.39. Excluding marketing funds, revenue was $54.5 million, a decrease of 6.8% compared to the same period last year, driven by negative organic growth of 5.7% and adverse foreign currency movements of 1.1%. Second quarter selling, operating and administrative expenses decreased $1 million or 2.8% to $33.9 million.

• Tightened revenue and profit range expectations for the rest of the year but increased agent count expectations. - Third quarter 2025: agent count expected to increase 1% to 2% over Q3 2024; revenue in range of $71 million to $76 million (including marketing funds $17 million to $19 million); adjusted EBITDA in range of $23.5 million to $26.5 million. - Full year 2025: agent count expected to be in range from 0 to positive 1.5% over full year 2024; revenue in range of $290 million to $296 million (including marketing funds $72 million to $74 million); adjusted EBITDA in range of $90 million to $95 million (previously expected $100 million).

• Uncertainty around tariffs, inflation, consumer confidence, and affordability challenges (persistently high mortgage rates). - RE/MAX Media Network launch has been slower than anticipated due to challenging macro environment impacting advertising spend. - Near-term pressure on revenue from Aspire as it ramps up. - Tempered outlook on broker fee contributing to top line decline.

Q: Tommy McJoynt-Griffith asked about the reduced guidance range and what's driving it.

A: Karri Callahan said it's due to delay in RE/MAX Media network ramp-up, tempered outlook on broker fee, and near-term pressure from Aspire on revenue.

Q: Nick McAndrew asked about the evolution of Aspire's resonance with agents and franchisee feedback.

A: Erik Carlson said Aspire has positive adoption, almost 2/3 eligible brokerages participating, seeing agents of different tenures using it, and brokers embracing it as part of recruiting strategy.